Senate OKs Two More Months For Payroll Tax Cut

Dec 17, 2011

The U.S. Senate wrapped up a tumultuous year of divided government with votes that keep the federal government funded through September and extend expiring unemployment benefits and a payroll tax cut another two months.

In a rare Saturday year-end session, the Senate's action averted a shutdown but was not the last word on the payroll tax cut extension.

The $915-billion omnibus spending bill the Senate approved on Saturday now heads to the White House for President Obama's signature. It reduces overall spending by $7 billion compared to last year, although the Defense Department gets an additional $5 billion.

Also approved was an 11th-hour bipartisan deal struck by Senate leaders to extend expiring payroll tax cuts and unemployment benefits for two more months. It contains a provision supported by Republicans but opposed by President Obama that speeds up the decision-making process for the controversial Keystone XL oil pipeline, which the president had delayed until after next year's elections.

On Saturday, President Obama said he's pleased that the Senate passed the legislation, but wants the extension to cover all of next year.

"In fact, it would be inexcusable for Congress not to further extend this middle-class tax cut for the rest of the year. It should be a formality, and hopefully it's done with as little drama as possible when they get back in January," he said.

The House has not yet taken a vote on the bill passed by the Senate and the president urged House lawmakers to add their approval when they reconvene on Monday. If approved, the bill would then go to Obama for signature, but it's not clear whether House Republicans will go along with the deal.

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